U.S. Hotel Forecast

Continued Growth Through 2017 Projected for U.S. Hotel Industry

The U.S. hotel industry is projected to experience continued performance growth through 2017, according to STR and Tourism Economics most recent forecast released on Monday at the NYU International Hospitality Industry Investment Conference.

The U.S. hotel industry is projected to experience continued performance growth through 2017, according to STR and Tourism Economics most recent forecast released on Monday at the NYU International Hospitality Industry Investment Conference.

For total-year 2016, the U.S. hotel industry is predicted to report a 0.4% increase in occupancy to 65.7%, a 4.0% rise in average daily rate to US$124.86 and a 4.4% increase in revenue per available room to US$82.07. During that same period, demand growth (+2.1%) is expected to outweigh supply growth (+1.7%).

Outlook

2016 Forecast

2017 Forecast

Supply

+1.7%

+1.9%

Demand

+2.1%

+1.9%

Occupancy

+0.4%

0.0%

ADR

+4.0%

+3.8%

RevPAR

+4.4%

+3.8%

Source: STR/Tourism Economics

Albeit at a lower growth rate than in previous years, we expect RevPAR in the U.S. to continue to reach record levels through 2017, said Amanda Hite, STRs president and CEO. The gap between demand growth and supply growth continues to lessen, and occupancy growth has decelerated, but rate will continue to drive RevPAR barring any unforeseen circumstances.

Among the Chain Scale segments in the U.S., the Independent segment is expected to report the largest year-over-year increases in each of the three key performance metrics in 2016: occupancy (+0.7%), ADR (+4.2%) and RevPAR (+4.9%). Two other segments are projected to report RevPAR growth above 4.0%: Upper Upscale (+4.3%) and Luxury (+4.2%).

Of the Top 25 Markets, 16 are expected to experience RevPAR performance between 0% and +5.0% in 2016. Six markets are expected to see RevPAR growth in the range of 5.0% to 10.0%: Dallas, Texas; Los Angeles/Long Beach, California; Nashville, Tennessee; Norfolk/Virginia Beach, Virginia; San Francisco/San Mateo, California; and Tampa/St. Petersburg, Florida.

For 2017, STR and Tourism Economics project the U.S. hotel industry to report flat occupancy, a 3.8% rise in ADR to US$129.66 and a 3.8% increase in RevPAR to US$85.22.

Also in 2017, supply (+1.9%) and demand (+1.9%) are expected to grow at the same pace.

Demand growth in the U.S. has outpaced supply growth each year dating back to 2010.

About STR

STR provides clients from multiple market sectors with premium, global data benchmarking, analytics and marketplace insights. Founded in 1985, STR maintains a presence in 10 countries around the world with a corporate North American headquarters in Hendersonville, Tennessee, and an international headquarters in London, England. For more information, please visit str.com.

About Tourism Economics

Tourism Economics, headquartered in Philadelphia, is an Oxford Economics company dedicated to providing high value, robust, and relevant analyses of the tourism sector that reflects the dynamics of local and global economies. By combining quantitative methods with industry knowledge, Tourism Economics designs custom market assessments, forecasting models, policy analysis and economic impact studies.

Logos, product and company names mentioned are the property of their respective owners.

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